Thursday, December 3, 2009

daytrading mistakes:

I think one of my weaknesses is daytrading.  I lose money consistently trying to make money intraday.  The largest gains have been made through multi-week /month holdings.  This is why my IRA outperforms my "trading" portfolio.

 I lost money trading BKS which was weak today.  I set a stop, lowered it, and lost more money while I bought the same stock in my IRA at a lower price, and held it.  I know BKS will be a winner, but I fear holding stocks in my "trading" portfolio because I'll get stuck with it.

I would likely outperform by treating my trading portfolio for now on as a swing portfolio.  If I feel the need to set a tight stop, I would do best to avoid that trade.

 I have adjusted how I use charts now (using no indicators) and it has helped me 'see' the markets better.

In general, I have picked many winners but still sell them far too early, even when I know they are going up... seeming to sabotage my own longer term timeframe when I make the purchase.

 The trading style that best suits me is a lot more boring.  Daytrading provides a great deal of excitement when I enter a trade.  I need to forego the excitement of trading.  Excitement equals losses.  Trading emotionally after a loss tends to result in bad decisions as well.  Once I determine a stock has support and is rising.  I can enter and exit if the support level fails.  But my timeframe needs to be longer and I need to be willing to leave a trade alone once I've determined it is suitable and meets all my criteria.

 Keeping the size small makes it easier to leave it.   To improve:

1) make fewer, better trades
2) keep trades on until support fails -- do not take quick profits or change spontaneously
3) lower position size.

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